David A. Grogan | CNBC
Hertz filed for Chapter 11 bankruptcy last week, citing the impact of the coronavirus pandemic on travel demand. Icahn held nearly 40% of the company’s outstanding shares, according to FactSet, and it was one of its 10 largest positions.
The stake represented around $ 342 million at the end of the first quarter, according to the documents filed, and Icahn’s investment fund had bought an additional 11 million shares in those three months. Icahn’s stake was worth just under $ 700 million in late 2019, before the pandemic triggered market liquidation and hit the travel industry.
Since equity investors are not protected during the bankruptcy process, it is possible that all of Icahn’s participation will be canceled.
Icahn first disclosed a stake in the company in August 2014, and its investment over the years has totaled $ 1.5 billion, according to the Wall Street Journal. Icahn plans to invest more in the business after bankruptcy, the Journal reported.
Hertz was trading at more than $ 90 per share in late July and early August 2014. The stock is now stopped at $ 2.84 per share.
Icahn officials did not immediately respond to requests for comment.